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Comment by petercooper | Hacker News Reader

Just for posterity, and so I can look this back up in a year's time, but.. I predict an oil price crash by this time next year. If we're not under $50/barrel by summer 2009, I'd be surprised.

I can't cite any great insights here, but I've tended to notice that when everyone jumps on the bandwagon of saying something bad is going to happen, some price is going to rise forever, or the like, the opposite tends to occur within a certain timeframe. It's now happening with property prices (and I remember the bulls just one year ago..) and it'll happen with oil. Same happens with memory prices too.

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That's hard to say. One can make the argument for a price crash as speculators have flooded into the oil and commodities markets and bid up prices. There is a lot of fear of peak <insert finite natural resource>. Once people got tired of it, prices would drop.

On the other hand, oil is a finite natural resource that has been pumped out of the ground for decades at an increasing rate. Only severely retarded politicians don't believe in peak oil or believe that oil is an infinite resource (they also believe in ghosts, so there). Thanks to China, India, and other countries deciding they want some basic level of civilization, the rate of increase in the rate of increase of demand means oil supplies and proven reserves are going down fast. That means there might not be a price crash and in a few years we will look at $6/gallon for gasoline as the good ole days.

Everything is finite. It all depends on /how/ finite things are. Technological advances, increases in efficiency, and the influence of competing technologies (electric, hydrogen, liquid propane gas, and so forth) will all have a role to play.

It is typically very hard to accept that these things can have a big effect, but that doesn't mean they won't (nor, of course, that they must, but the odds are better that they will). The price of oil will be as "immaterial" within 50 years as the prices of horses or gas lamps were immaterial in 1940 compared to 1890.

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